John Kenneth Galbraith is an evolutionary economist. The principal themes in the influential works of this prolific author--and most of all in American Capitalism (1952), The Affluent Society (1958), The New Industrial State (1967) and Economics and the Public Purpose (1974)--are not marginal cost and marginal revenue, consumer's surplus and diminishing returns, but rather intellectual development and institutional progress. The issues Galbraith addresses when he examines continuing changes over time in mind and matter are very different indeed from the questions raised by neo-classical economists when they wrestle with scarce endowments, alternative employments, equilibrium positions, and allocative efficiencies. The neo-classicist raises little question about the price of tea and the market for biscuits. The institutionalist addresses big issues such as corporate capitalism and social trends. The neo-classicist is likely in the circumstances to dismiss evolutionary economics as the bastard brother of soft-core sociology and to deny to Galbraith's historically oriented speculations on the status of science. The institutionalist is likely to reply, however, that it is the neo-classical orthodoxy itself that is limited and non-scientific, precisely because it treats as inert and invariant a systemic framework that is in truth organic and dynamic. Organic, dynamic--and very, very constraining as well: "Given the decision to have modern industry, much of what happens is inevitable and the same."[1] Man's freedom to shape events in accordance with ideas is, evidently, severely circumscribed by the momentum inherent in matter: "The imperatives of technology and organization, not the images of ideology, are what determine the shape of economic society."[2]

Galbraith is a strong economic determinist who insists that, "for being right . . . it is better to have the support of events than of the higher scholarship."[3] Perhaps surprisingly, therefore, he is an active social reformer as well. Shocked by manipulative advertising and salesmanship. concerned about environmental pollution, alarmed at the disproportionate growth of trivial consumables relative to essential services, fearful lest arsenals of sophisticated weaponry built up at the expense of slum clearance, health and education should one day come to annihilate the persuaders and the persuaded alike, Galbraith has consistently adopted the posture of a prophet crying out to his tribe to abandon the bad and return to the good: "No one who believes in ideas and their advocacy can ever persuade himself that they are uninfluential .... I have hopes that popular understanding will reverse some of the less agreeable tendencies of the industrial system and invalidate, therewith, the predictions that proceed from these tendencies."[4] Thence the paradox. Galbraith the social reformer is adamant that man can and must make himself the master of his economic destiny: "Knowledge of the forces by which one is constrained is the first step towards freedom."[5] Galbraith the evolutionary economist, on the other hand, is equally adamant that it is man's sad fate to dwell forever in that powerless realm where even political proposals are thrown up "not by parties and politicians but by circumstance."[6] Galbraith the intellectual is convinced that ideas have consequences: "If belief is the source of power, the attack must be on belief."[7] Galbraith the scientist, however, is equally convinced that thought is afterthought: "In social matters, critics are an interim phenomenon. Given a little time, circumstances will prove you either right or wrong."[8] Galbraith the determinist strongly believes that events breed ideas, Galbraith the moralist, that ideas shape events; and it is not only the neo-classical economist who is bound to speculate on the extent to which Galbraith's intellectual system is in fact over-determined and therefore seriously flawed.

A horse divided against itself cannot stand. Much the same must be said of an intellectual system of which the central supports are incompatible and contradictory. It is the thesis of this article, however, that the Galbraithian system is able without difficulty to reconcile the determinism with the morality, the evolutionary economics with the social reforms. The article proceeds by way of two sections--the first headed "Matter and Mind," the second headed "Mind and Matter"--to the conclusion that Galbraith's account of the important interaction between thinking and acting is logically consistent and internally coherent. Such a conclusion is not, of course, equivalent to an assertion that Galbraith's conjectures and hypotheses constitute a complete and unobjectionable depiction of present-day socio-economic realities: it is notoriously difficult to test the factual accuracy of ambitious world-views, and this article (fully consonant, therefore, with Galbraith's own standard practice) makes no attempt to do so. What the conclusion of this article suggests is more modest than confirmation or endorsement, but of some interest nonetheless, that Galbraith on ideas and events is well worth careful study and that his intellectual system is far from resembling a horse divided that is bound to fall.

Matter and Mind

Economies are in motion, Galbraith argues, and the capitalist system is no exception: "We have a certain number of people who call themselves scholars of capitalism, who insist that it had a virgin birth in 1776 with Adam Smith, and it hasn't changed since. But I would urge that we must see capitalism, as we have seen socialism, as being in a constant process of transformation."[9] The poorer countries would be ill-advised to emulate either the American or the Soviet model without assigning due weight to the constraints of historical process: "The economic design appropriate to the later stages of development cannot, without waste and damage, be transferred to the early stages."[10] The richer countries would be no less ill-advised, themselves neglecting historical process, to treat today's design as some eternal blueprint: "Economics is not durable truth; it requires continuous revision and accommodation. Nearly all its error is from those who cannot change."[11] Economies are in motion, Galbraith argues, and mind that lags behind matter is doomed to radical misapprehension of the laws that govern the activities of production, distribution and exchange in the modern new industrial state.

Economic systems have evolved significantly, Galbraith believes, since the times when Smith and later Marx opted to situate their theories of capitalist conditions within a conceptual framework of predatory entrepreneurs and competitive markets. Some contemporary thinkers continue to espouse that now-outdated conceptual framework, not least of them Friedrich von Hayek ("one of the finest and most untouched of late-eighteenth-century minds").[12] Distinguished though such thinkers may be, Galbraith emphasizes, the inevitable truth is that history is not on their side. Events have moved on, the world has changed, and the intellectual with an obsolete ideology should therefore update his ideas by incorporating into his conceptual framework the following three sets of phenomena.

Large-scale operation

Long production-runs, long gestation-periods, large quantities of sector-specific fixed capital, the premium on technological advance, the research and development overhead--all of this has led to the emergence of the large corporation. Large firms being in the vanguard of progress, Galbraith says, such size (both in absolute terms and relative to a specific market) is more to be welcomed than to be feared: "No important technical development of recent times--atomic energy and its applications, modern air transport, modern electronic development, computer development, major agricultural innovation--is the product of the individual inventor in the market system. Individuals still have ideas. But--with rare exceptions--only organizations can bring ideas into use."[13]

Size is not to be feared. What is to be expected, however, is the exercise of power, since the large firm is compelled by the very logic of its otherwise vulnerable position to "plan" its market, to forecast the unforeseeable and to shape the inconvenient: so great is the financial commitment many years in advance of the final product finally being marketed (of the final consumer, indeed, even learning of the very existence of a new product) that the corporation has no choice but to break free from the straitjacket of demand-led growth and to utilize its muscle in its own interest. Time is on the horizontal axis, "large tasks require large organizations,"[14] risk rises with duration and commitment, and the large firm would simply not survive to confer its unquestionable benefits if it were not able to influence its environment:

The modern large corporation and the modern apparatus of socialist planning are variant accommodations to the same need. It is open to every free-born man to dislike this accommodation. But he must direct his attack to the cause. He must not ask that jet aircraft, nuclear power plants or even the modern automobile in its modern volume be produced by firms that are subject to unfixed prices and unmanaged demand. He must ask instead that they not be produced.[15]

And that few of us would wish to propose.

Economic evolution means large-scale operation. Large-scale operation in turn presupposes protection by means of plan--vertical integration (including multinational expansion) to secure guaranteed inputs and outlets; horizontal integration to ensure the suppression of an unpredictable competitor; inter-firm contracts to stabilize supplies and coordinate production-plans; price-fixing in tacit alliance with friendly rivals such as guarantees to each "a reasonably reliable share of the market"[16]; expansion via retained earnings in an attempt to obviate dependence on outside lenders; cost-push inflation (accompanied by diminished dividends) as part of a policy of passing on to the consumer (or backwards to the shareholder) the burdensome task of buying off potential union disruption; automation of production, both because capital (being internally generated) is more secure than the supply of skilled labor and because machines, once in place, "do not go on strike"[17]; manipulation of microeconomic demand-levels via advertising and salesmanship in such a way as to obtain planned-for sales at planned-for prices; alliance between corporation and state such as produces tariffs, quotas, subsidies, contracts, complementary infrastructure and macroeconomic stabilization. Large-scale operation is a characteristic of mature capitalism. So too is planning, the indispensable antidote to the competitive uncertainties that would make technological advance in the large-firm sector all but impossible: "The enemy of the market is not ideology but the engineer."[18]

The failure of planning would have serious consequences indeed; and the reader who shares with Galbraith a positive attitude to advance will therefore be pleased to learn from the evolutionary theorist that manipulation seldom fails, competitors seldom undercut, discovery processes seldom subvert predictable outcomes. Ordinary men and women might not be entirely pleased with a substitution of producer for consumer sovereignty such as compels them by trickery to buy "a lawn mower that can be guided by transcendental meditation"[19] at some price the corporation picks out of the air, or with amicable competition among the few such as constrains even the low-cost firm from cutting its prices lest its friendly rivals then suspect it of seeking to invade their market-share. Ordinary men and women might nonetheless be fully prepared to bear these social costs were they to be entirely convinced that the corporations and the planning are linked, genuinely and inevitably, to technological advance. Normally Galbraith is able to provide the requisite reassurance. Sometimes he is not, as when, drawing attention to "the well-recognized tendency toward organizational stasis and senility in the modern great enterprise,"[20] he goes so far as to cite the "hardening of the arteries" brought about by corporate bureaucratization as one of the causes of the decline of the steel industry in the United States: "Until you had done business at length with top officers of the steel corporations, you didn't really appreciate the intellectual qualities of a billet of steel."[21] Such organizations and corporations are just as likely, it would appear, to stigmatize novelty as eccentricity as actually to pioneer new products and transformed processes: "In a great organization . . . there is a strong tendency to measure superior intelligence by its resemblance to what is already being done."[22] Ordinary men and women are bound in the circumstances to ask themselves if the innovativeness is truly worth the other-directedness, and to read with some concern Galbraith's concession that the ultimate scale-economies of the giant organization are more nearly those of dominance than of dynamism: "For this planning--control of supply, control of demand, provision of capital, minimization of risk--there is no clear upper limit to the desirable size."[23] In such circumstances, ordinary men and women might suggest, perhaps there remains after all a germ of truth in the classical message that small is beautiful.

Perhaps there does, but not in Galbraith's interpretation of the new industrial state. The modern economy, he accepts, is a dual economy; and he acknowledges the continuing existence alongside the planning system (roughly equal to it in size, moreover: each system accounts for approximately half of private sector GDP)[24] of the small firm sector and the traditional owner-entrepreneur. The market system is the world of the passive price-taker and the perfect competitor. Technologically backward, lacking in scale-economies, prone to the self-exploitation of the small shopkeeper's seven-day week, crushed under the heel of their powerful trading partners, and shown little mercy by the sovereign consumer, the participants in the market system are to Galbraith something of a footnote in the history of economic growth. They are yesterday's men, matter is in motion, and the fact is that events have marched beyond their reach or ken.

The technostructure

The archetypal scarce input in the advanced economic system is not land (as it is at the stage of peasant agriculture) and is not capital (savings for investment being abundant in affluent societies). Rather, it is skilled, trained manpower in the form of highly-qualified specialists such as engineers, advertising experts, accountants, lobbyists, lawyers. The premium being on specialized expertise, moreover, that manpower is in essence only of value when situated in balanced teams making collective decisions in conferences at committee level: each individual, however determined and idiosyncratic, knowing a lot but only about a little, there is simply no alternative to information-sharing within teams and the "synthetic personality"[25] that it is nowadays the locus of decision-making power in the powerful planning system.

The planning system is powerful. It is also characterized by concentration--a phenomenon well illustrated by Galbraith's statistic relating to the situation in the United States in 1971 ("The concentration of economic activity has followed a similar course in the other industrial countries,"[26]) that "the 333 industrial corporations with assets of more than million had a full 70 per cent of all assets employed in manufacturing."[27] Given such power and such concentrated power, Galbraith insists, it is clearly of the greatest social importance to identify the personal objectives of the powerful technocrats who dominate the powerful corporations. It is they, after all, who pipe the tune to which the whole nation dances: "The goals of the mature corporation will be a reflection of the goals of the members of the technostructure. And the goals of the society will tend to be those of the corporation."[28] As they decide, so we live--this Galbraith terms the "Principle of Consistency."

Technocrats make decisions and they do so in the interests of the salary-earner who holds no property-rights and receives no share in the dividends. Given their economic position, those on a salary cannot reasonably be expected to devote serious attention to the maximization of profits that will be paid out to others at the end of the day. Rather, they must be expected to develop maximands of their own that are more closely associated with their own perceived interests. One of these is likely to be job-satisfaction: graduates with trained minds welcome the challenge of the new and are keen to put their hard-earned technical virtuosity to some use, even if the cost of amusing innovativeness and accelerated obsolescence happens to be a diminution in the profits remunerating the capitalist. The second is security: the organization man values continuity of employment, the technostructure as a whole cannot afford the loss of key specialists, and any committee that wishes to be effective jealously defends its autonomy against uninformed outsiders (politicians and property-owners, managers and money-lenders) who would seek through intervention to countervail its power. The third goal is growth: expansion is a means for the consolidation of security but it has an affirmative purpose as well, insofar as it enhances the power, pay, prestige, perks and promotion-prospects of the organization men who bring it about. Three objectives--and not one of them the textbook case of profit-maximization.

As firms grow large and ownership disperses, Galbraith is adamant, as language becomes specialized and "exclusion by technical complexity"[29] the order of the day, so events bring about a "euthanasia of stockholder power"[30] which ideologues committed, however passionately, to the profit-first motive will find it totally impossible to reverse: powerless, faceless and ill-informed, the modern shareholding capitalist is "a passive and functionless figure"[31] whose vote, being "valueless,"[32] is unable to influence the decision-making technocrats who turn out to be modern society's corporate elite. No fear of hostile takeovers, undervalued assets, institutional investors or shareholders' revolts clouds Galbraith's logic, and this is why he is able to reach a controversial conclusion concerning capital such as is likely to enrage the privatizers and the nationalizers alike: "The ultimate ownership of the very large industrial corporation, public or private, matters little."[33] Galbraith's neglect of the manifold techniques at the disposal of shareholders to put pressure on managers to put pressure on technocrats to put profit-seeking activity first is undoubtedly to be regretted. The omission does not, as it happens, have quite the revolutionary impact upon the properties of the Galbraithian system that might perhaps have been anticipated: the Galbraithian firm is committed to growth with security, therefore to expansion out of retained earnings, thus to considerable profits even if not to maximal profits. Powerless or powerful, it would appear, the Galbraithian capitalist is unlikely to be particularly disappointed with the actual performance of the Galbraithian technostructure. Nor are the basic predictions of the old-style economist likely to be called seriously into question by the emergence of the new-style objectives: profit as means or profit as end, the economist will reason, theory predicated upon profit-oriented motivation is not significantly less relevant in the one case than it is in the other.

Yet Galbraith regards the profit-motive as having little explanatory power in the world of the giant corporation and the sophisticated technostructure; and it is in no small measure because of the continuing obsession of the neo-classical economist with profit-maximization (not job-satisfaction, not security, not growth) that Galbraith dismisses the textbook economics as fundamentally out of date. The textbook economics may, he concedes, provide a reasonable account of what happens in the small firm sector. Sadly, he concludes, it also mystifies and confuses by treating the planning system precisely as it would treat the perfect competitor. Profit is one instance of this propensity--since the non-evolutionary economist seems all but unaware of the organizational revolution. Power is a further instance--since the theorist of discrete individuals (as opposed to corporate groups) in effect, and "rather systematically, excludes speculation on the way the large economic organizations shape social attitudes to their ends."[34] Plenty is a final instance--since the dismal scientist of Ricardian scarcities has nothing to say about satiated societies in which the over-developed consume too much, not too little, and "wants are increasingly created by the process by which they are satisfied."[35] Profit, power, and plenty--all three concepts are valuable illustrations of the important proposition that, there being few "fixed and permanent truths" in economics, economists must accept that the sheer mutability and variance of their subject-matter renders it all but impossible for their science to regard itself as the close relative of the timeless, static, eternal verities of theoretical physics: "It is the paradox of the discipline that it is the wish so to see itself that commits economics to an obsolescence in a changing world that, by any scientific standard, is to be deplored."[36]

To be deplored, it must be stressed, not merely because the escape from evidence about events into the spurious precision of mathematical logic imposes a high cost in the form of "the removal of the subject several steps further from reality"[37] but also because a simplified textbook model of contemporary capitalism in which "Exxon is held to be indistinguishable from the corner grocery or the village pharmacy in its exercise of power"[38] has the dangerous de facto function of hiding from view the market-suppressing propensities of the gigantic and the dominant: "Marshall's world of competitive entrepreneurs, maximizing consumers and a suitably reticent state continues to serve the ends of comfortable orthodoxy today. It does not describe the world as it is."[39] It does not describe the world as it is but neoclassical economists for all that continue to teach impressionable students as if it did. Economists do not sell the services of obfuscation and indoctrination to the technostructure for cash (those services are rendered, "in the main, in innocence and in the name of scientific truth"),[40] but their commitment to ideas dramatically out of step with events nonetheless commits them just as effectively to the unintended status of high priests of distortion and disguise.

Economists unwittingly serve the goals of the technostructure by failing to describe the world as it is. Civil servants, on the other hand, serve the goals of the technostructure not by concealing them but rather by sharing them--by perceptively grasping, in other words, that the objectives of the person on a salary are not radically different whether he or she is in state employment or in the private sector. Thence the phenomenon of "bureaucratic symbiosis," of organic interdependence between two sets of organization men both committed to job-satisfaction, security and growth and each eminently well-placed to assist the other in the pursuit of the common objectives: "Rarely does the private technostructure meet a public bureaucracy without discovering some area in which there can be co-operation to mutual advantage."[41] Events to that extent have evidently moved beyond the ideas of Marx as well as beyond those of Marshall--since "the modern state . . . is not the executive committee of the bourgeoisie, but it is more nearly the executive committee of the technostructure."[42]

Politicians, admittedly, can prove a problem to the civil service careerist, and so can the free market ideology of the economic mind, which reinforces the taxpayer's not-unexpected reservations about an increase in public spending. Thus it is that American technocrats and American bureaucrats, aware of the superpower mystique of their nation and the paranoid anti-communism of so many of their fellow-citizens, selectively target their pressures in precisely that area where they appreciate that resistance will be least, namely national defense. Their calculation, Galbraith believes, has yielded them rich rewards--as witness the following: "The ABM, the new generation manned bomber and the nuclear aircraft carriers serve not the balance of terror, but the organizations that build and operate them."[43] Soviet technocrats and Soviet bureaucrats, Galbraith adds, are presumably no less sensitive to the organizational objectives subserved by military preparedness and cold war mistrust. They will in the circumstances (an interesting illustration of the broader proposition that "the military establishment on one side supports the military establishment on the other")[44] join their voice to that of their American counterparts in warning against multilateral disarmament and peaceful co-existence: such de-escalation could, after all, cost them "the occupation, prestige, promotions that go with active military operations."[45] Far better than de-escalation is re-escalation, the technocrats and the bureaucrats will say. What they say is what they secure, and the result is "entrapment in an ever-increasing cycle of outlay": "We force action on the Soviets, they on us. So it continues."[46] Yet, morally speaking, Galbraith suggests, "there is something uniquely obscene about competition to promote weapons of mass destruction for purposes of improving the stock-market position of a corporation."[47] And there is a more immediate concern, Galbraith would add, that it is not merely in the long-run that we shall all be dead if the arms race powered by organizational vested interest is not brought to a halt: "In the aftermath of nuclear war, the difference between capitalism and communism is not going to be evident even to the most committed ideologist."[48] Events have consequences. Those consequences, it is clear, need not have any appeal at all.

The Intellectual Revolution

The story so far is a dismal one. Large corporations with the capacity to plan have disproportionate power relative to the insignificant competitors of the market system. Technocrats and bureaucrats have organizational goals that they impose on their society by means ranging from manipulative sales-strategies to militaristic propaganda and nationalistic fear-mongering. Free market economists conceal concentrated power by retreating into a fantasy-world of jargon and symbol signifying nothing. Interventionist politicians reinforce concentrated power by means of subsidies and contracts. The classical proletariat is pacified into affluent acceptance through higher pay at the expense of consumers and capitalists. Matter is in motion and things are taking their course. No one but a technocrat or a bureaucrat could, however, in Galbraith's perspective, be entirely satisfied with all aspects of the course that they are taking. Evolution, it would appear, has been not always beneficent but often malignant.

Yet the story so far, however dismal, is not complete. Events produce the technostructure and in that way produce a problem. Events, fortunately, also produce a new class and in that way produce a locus of countervailing power. That new bloc in the world of groups is the intelligentsia, the writers and the thinkers, the educational and scientific estate. It is all very tidy. More educators are the sine qua non for an expanded technostructure. An expanded technostructure then leads inevitably to an expanded intelligentsia, if only because paper certification is the "relevant class distinction in our time."[49] Trained manpower presupposes academies and educators. Academies and educators are, however, by no means favorable to the kind of society that the manpower they train subsequently proceeds to breed and form. In other words: "The economy for its success requires organized public bamboozlement. At the same time it nurtures a growing class that feels itself superior to such bamboozlement and deplores it as intellectually corrupt."[50] And thus do the negators beget their own negation.

All education, for one thing, is oriented towards the development of the critical intelligence; and most of all this is true at the higher levels, where a candidate doing original research is compelled by the logic of his loneliness to think for himself. Galbraith believes such independence of thought to be a transferable skill. As education spreads, he reasons, so therefore will the resistance to conditioning and persuasion spread; and this evolutionary force is a guarantee "that there will be systematic questioning of the beliefs impressed by the industrial system."[51] The manipulators will gnash their teeth at the increasing skepticism that will greet their claims, for the truth is that a more educated citizenry will also be a more evaluative one.

Education by its very nature is individualistic, where the technostructure is collegial, and in that way too it challenges the new corporate order: all education, after all, "allows and encourages a self-assertion and a self-expression which are inconvenient for those who prefer the acquiescence inherent in accomodation."[52] The collectivity of specialists makes decisions cooperatively in teams, while the new graduate is used to intellectual entrepreneurship; and there is also the point that the technostructure functions by means of conditioned power (power that operates through belief, commitment, identification, the common acceptance of a shared purpose), whereas the new graduate is more accustomed to thinking in terms of power that is condign (in the sense of being backed up by the threat of adverse consequences) or power that is compensatory (power buttressed, in other words, by rewards and privileges).[53] The new graduate, it would appear, is likely to be something of a misfit in the world of corporate capitalism. Perhaps with time he will adapt. Perhaps he will not--and perhaps an addiction to individualism, early acquired, will render him unwilling even to try. Such tendencies, Galbraith reports, are already beginning to manifest themselves: "Good students, when asked about business, are increasingly adverse. They hold it to be excessively disciplined, damaging to individuality, not worth the high pay, or dull."[54] While some critics will object that Galbraith's evidence was not scientifically collected and other critics will suggest that tendencies detectable on the campuses of the late 1960s are not necessarily phenomena for all seasons, the crucial point is that Galbraith's confidence in his own determinism is total and totally unshakeable: the technostructure is condemned to negation and the individualism inherent in education is an important part of the process of change.

Then there are the educators themselves. Appreciative of good literature and the visual arts like all enlightened consumers who have been exposed at school and university to the finer things in life, tidily but sensibly dressed when commercialized fashion preaches conspicuous consumption, insistent that their work be non-pressurized and their research topics of their own choosing even if the cost of greater fulfilment is lower pay, the readers and writers of books and articles are the role-models for the post-acquisitive, post-competitive, post-materialistic society that is to come. The role-model will one day be the norm.

Yet the educational and scientific estate did not come into being for educational and scientific reasons: "It is the vanity of educators that they shape the educational system to their preferred image. They may not be without influence but the decisive force is the economic system. What the educator believes is latitude is usually latitude to respond to economic need."[55] It was events rather than ideas that stimulated the evolution of the estate; for the fact is that it was a rapidly rising demand for technocrats (and not some exogenous force such as a high-income elasticity of demand for learning as a good thing in its own right) that was primarily responsible for the rapidly rising demand for educators that has been a characteristic of the advanced industrial state. The numbers of educators initially expanded in order to train the scarce and prestigious technocrats, the academics merely sharing via reflected glory in the high social standing of the key economic input of the epoch. Later however, the nature of the status-hierarchy was altered as the reputation of the technocrat became tarnished by the excrescences of corporate planning and the prestige of the intellectual was heightened by the increasing concern of affluent societies with cultural uplift. Nowadays, Galbraith says, the signs of major change are clearly to be seen: "The position of the intellectual is now far more secure than that of the businessman."[56] The future, evidently, is almost upon us. Matter is in motion, events create ideas--and a new class is brought into being and prominence that is capable of revealing the truth.

Mind and Matter

Although it was events and not ideas that catapulted the intellectual into his newly found position of prestige and power, the person of ideas is by no means likely to be dissatisified with the direction of change. Looking at the course of evolution from the perspective of his own self-interest, he will be deeply appreciative of the status-rent an admiring history apparently defines as his due: the intellectual, after all, "along with the public official and politician, is the natural competitor of the businessman for what may be called the solemn acclaim of the community."[57] Besides that, and more altruistically, the intellectual will see that noblesse oblige and so does enlightenment: "For the goals that are now important there are no other saviours. In a scientifically exacting world, scientists must assume responsibility for the consequences of science and technology. For custody of the aesthetic dimensions of life there is no substitute for the artist."[58]

Events have enhanced the prestige and power of the educational and scientific estate but they also exercise a severely constraining influence upon the freedom of choice of the intellectual that no one but an individualistic fool or a romantic charlatan could possibly fail to notice. Intellectuals trade in ideas--that much is clear. Yet to say that a person trades is not the same as to say the he or she trades with success; and just as a merchant is vulnerable to being left with a stock of goods for which no buyers can be found, so the intellectual is in grave danger of preaching to no one but himself should the ideas he advances happen to be manifestly inappropriate in the specific material conditions that economic evolution brings about. It is the events that suggest the ideas, and the persuader who wishes to persuade would therefore be well-advised to go with the flow. Thus it was that Adam Smith's great success in attacking the mercantilist system of intervention resulted from his times and not merely from his rhetoric: "Unrestricted competition did not achieve its reputation as a major public good until the different circumstances of manufacturers following the Industrial Revolution made freedom from craft-guild and government restraint a preferable alternative. Then, as ever, the ideas--the social conditioning--were brought abreast of the need."[59] In 1776 Adam Smith was a success as a persuader because he gave voice as an intellectual to the ideas that had already been selected and prescribed by the events. Two centuries earlier the same ideas would have fallen upon stony ground and been lost. This important lesson the present-day educational and scientific estate must take to heart in its incipient struggle with the technocrats and the bureaucrats: there is one body of concepts that alone fits the facts. Nor are those ideas the property of the intellectual alone. The educational and scientific estate may be one step ahead of the social consensus but seldom two: Galbraith, presenting himself as "a strong economic determinist,"[60] his primary contention would be that it is events and not educators that are in the last analysis the true gravediggers of the planners and the manipulators.

Events produce ideas, there is one name on the ballot, and the car of any possible color provided only that it be black, may usefully be described according to three sets of perceptions.

Demystification

People inthrall to an out-of-date conventional wisdom must in the first instance challenge the intellectual status quo, and an obsolete theory of demand is an obvious target. Nowadays, Galbraith says, there operates an extensive battery of instruments for contrivance and want-creation, ranging from the "well-considered mendacity"[61] and the "ruthless psychological pressures"[62] of persuasive commercialism lacking informational content ("Only a gravely retarded citizen can need to be told that the American Tobacco Company has cigarettes for sale")[63] to a wasteful acceleration of product development that is more in the interests of the technocrat than of the consumer ("To create the demand for new cars we must contrive elaborate and functionless changes each year").[64] It was in order to draw attention to the naivete of textbook consumer sovereignty in the era of "mendacity" and "pressures" that Galbraith wrote his Affluent Society, but he was also aware that a better-educated and better-informed populace was increasingly in a better position even without his good guidance to see through the bamboozlement to the truth beneath: more and more frequently, Galbraith notes, "the merest child watching television dismisses the health and status-giving claims of a breakfast cereal as 'a commercial'."[65] Matter is in motion, events create ideas, and the intellectual arriving post festum has no choice but to accept that he codifies far more than he creates.

As with an obsolete theory of demand, so with a Cold War commitment to lethal weaponry. The problem is the organic interdependence of special pleaders in the form of munitions manufacturers and defense ministries, the solution is multilateral disarmament and peaceful coexistence, and the catalyst is the educational and scientific estate: "The nuclear test ban treaty of 1963 would not have been achieved except by the initiative of the scientific community. General public and political awareness of the dangers of nuclear conflict, the desirability of detente with the Soviet Union and the technical possibilities for disarmament owes a great deal to the scientific community. It owes very little to the military, diplomatic, and industrial community."[66] Intellectuals are intimately acquainted with the weapons of destruction and have a universal distaste for further confrontation. Consider the case of Dr. Yevgeny Chazov who, with an American, Dr. Bernard Lown, was instrumental in founding the International Physicians for the Prevention of Nuclear War, for which he and Dr. Lown were awarded the Nobel Peace Prize in 1985: "In recent years Dr. Chazov has become widely known in American and world medical circles for his leadership in drawing attention to the medical consequences of nuclear war."[67] Consider the case of Dr. George Kistiakowsky, Harvard Professor of Chemistry, scientific adviser to President Eisenhower, the man who designed the detonating device for the first atomic bomb, the co-founder of the Council for a Livable World, the committed "keeper of the public conscience," whose expert knowledge gave him an insider's insight into the potential outcome of the arms-race: "George Kistiakowsky had a deep and enduring sense of responsibility for his community and all who made it up."[68] Consider the ease of Dr. John Kenneth Galbraith, Harvard Professor of Economics, political associate of progressive Democrats including Stevenson, Kennedy, McGovern, McCarthy, co-founder of the Americans for Democratic Action, co-chairman of the American Committee on East-West Accord, moderate pragmatist and friend of moderate pragmatists ("Arthur Schlesinger, whose non-communist credentials were and have remained adequate, was driven to express the thought that Laos was not a dagger pointed at the heart of Kansas"),[69] who repeatedly calls upon his audiences and his readers to "unite now in a crusade to get nuclear energy under control,"[70] to ensure that "no one is now elected, Republican or Democrat, conservative or liberal, who thinks nuclear war an option."[71]

Dr. Chazov, Dr. Kistiakowsky and Dr. Galbraith--all three had this in common, that they as responsible intellectuals took a principled and public stand with respect to the Cold War commitment to lethal weaponry. The contribution of these thinkers and others like them in focusing the public awareness must not be neglected, but nor should their autonomous influence, Galbraith warns, be exaggerated: given enough time, Galbraith insists, the truths he and his fellow intellectuals revealed would have come to light in any ease. Thus the sheer administrative impossibility of coordinating through imperative planning an increasingly sophisticated and diversified economy inevitably imposes upon the Iron Curtain countries the need for decentralized decision-making and market incentives: "There is a popular cliche, deeply beloved by conservatives, that socialism and communism are the cause of a low standard of living. It is much more nearly accurate to say that a low and simple standard of living makes socialism and communism feasible."[72] With evolution comes convergence, with convergence reform, and with reform a climate of tolerance for the development of which it is events rather than ideas that must ultimately be assigned the primary causal role: "To recognize that industrial systems are convergent . . . will, one imagines, help towards agreement on the common dangers in the weapons competition, on ending it or shifting it to more benign areas."[73] The well-publicized differences between the Eastern countries help to erode the rabid anti-communism of more confrontational times, while in the West the out-of-date stock of perceptions has been badly discredited by a variety of well-publicized disparities between bureaucratic self-deception and real truth ranging from the abortive Bay of Pigs invasion in 1961 ("Organization needed to believe that Fidel Castro was toppling on the edge")[74] to the inescapable debacle in South-East Asia a decade and more afterwards ("Vietnam will be the graveyard of the old policy")[75]. The old ideas, rendered obsolete by the march of events, are increasingly perceived to be obsolete by a citizenry that increasingly substitutes nuclear-free conurbations for private fallout shelters, the nuclear freeze for the military incursion--and that increasingly puts pressure on its political leaders to supply that which is increasingly in demand: "In the past there has been nothing more salutary in our governmental process than the speed with which we have discarded those public figures who have seemed to be casual about nuclear weapons and war."[76] Thus it was that Galbraith in 1987 was able to write as follows about the military-industrial complex: "I have a feeling that the people of the United States are very strongly aware of this problem. In the presidential election next year all of the candidates--the Democratic candidates, at least--will be talking about the need for arms control and for restraint on military spending. This will be in response to very clearly articulated public opinion."[77] That public opinion did not spring full-grown from nowhere, but neither was it the manufacture of responsible intellectuals such as Dr. Chazov, Dr. Kistiakowsky and Dr. Galbraith: people of ideas publicize and agitate, but the perceptions for which they fight are unlikely for all that to enjoy any widespread currency unless they happen to be solid truths backed up by evolution and already gaining ground in their own right. Matter is in motion, people are not stupid, and critics who see Galbraith the persuader as a paternalist and a manipulator evidently see him both as less tolerant and as more influential than he would perhaps say that he saw himself.

Balance

Demystification done, the next task is to re-mix the mixed economy in order, quite specifically, to secure an expansion (both absolute and relative) in public expenditure. Here as usual, fortunately, matter is in motion, events suggest ideas, and evolution contains within itself the seeds of the balance that the bamboozlement seeks in vain to block.

Thus casual inspection reveals public poverty juxtaposed to private affluence--a scarcity on the one hand of "some of the most significant and civilizing services."[78] (roads, schools, parks, health insurance for the aged, medical care for the impoverished, law and order, low-cost housing), a surplus on the other hand of trinkets of "considerable, even extreme, frivolity and unimportance"[79] (as typified by the toaster that prints an inspirational message on each piece of toast)[80]. The person of ideas does not create the revulsion that ultimately leads to the transcendence of the obscene contrast, however much he may strive to ensure that no citizen falls through the net of awareness or fails to take up the truth that is his by right: events themselves create the revulsion, once the extent of the imbalance is properly perceived. Thus the sight and smell of decomposing rubbish cause the sensitive to forego the gold-plated mousetrap in favor of more frequent refuse-collection; while race riots and crime waves bring home the benefits both of better police services and detection-units (to arrest the muggers and deter the offenders) and of improved public libraries and inner-city swimming pools (to stem the frustration and curb the resentment). The dependency culture, moreover, is a further reason for expanded public expenditure, and most of all once it is correctly perceived that the best antidote to long-run benefits in cash is a major short-run injection of benefits in kind: "Good health services increase the number of people who are physically and mentally able to take part in the economy... Mostly this is what a good educational system accomplishes.... We should help people to participate in the economy; we should help them to help themselves."[81] The groundswell of opinion in support of the "significant and civilizing services" would appear to be singularly in debt to the enlightened self-interest of the middle-classes who value clean, safe streets and are keen to see a reduction in the burden placed upon the integrated by the marginal. In places--as in the following--Galbraith says as much: "Perhaps the disadvantaged are now too few to make a revolution. But they could make life uncomfortable for all."[82] Even in the new industrial society, it would seem, the capitalist system still retains the symbiotic relationship with the welfare state that was so distinctively a characteristic of British and American economic history in the recent past: "No one can suppose that capitalism would have survived without those attempts to remedy what was wrong.... This was an absolutely indispensable design for saving capitalism. Capitalism wouldn't have survived if it hadn't had the rough, harsh edges taken off by the welfare state."[83] Galbraith's interpretation of the evolution of the modern welfare state may, of course, be dismissed by some critics as unsupported, impressionistic, anecdotal, even erroneous; and few readers will find it easy to incorporate into his structural account of the "indispensable design for saving capitalism" the fact that so many of the welfare services are consumed disproportionately not by the poor but by the affluent. What matters most in the present context is not, however, the accuracy of Galbraith's interpretation so much as the use he makes of it--which is to demonstrate, in effect, that events produce ideas, that capitalists desiring survival came also to desire welfare, and that what is today needed is no more than still more of the same.

Enlightened self-interest plays an important role in Galbraith's account of mind, matter and balance; but it would be wrong to suggest that Galbraith attributes little significance to the social democrat's traditional constructs of compassion, citizenship and, above all, community. On the contrary, Galbraith states explicitly that these non-economic supports are required by the logic of economic evolution actually to become stronger over time: "In a complex and interdependent world, the sense of community must be strong and ever stronger."[84] What Galbraith would add, however, is that the demand for a social ethic may be expected in the course of social evolution to produce that social ethic, and that the functional need for social decency is a case in point: "I am persuaded, as was Marx, . . . that economic development is itself an education in social cohesiveness and cooperation."[85] As we grow more affluent, in other words, so we grow more altruistic, more integrated and more open to the joint effort of "public and community initiative and cooperation" such as is far less frequently encountered in earlier stages of economic evolution than in our advanced own. It is evidently more than enlightened self-interest alone that causes the developed capitalist countries to reject "a rigid adherence to individualist precept" ("the sacrifice of those who could not make it in a stern competitive struggle"): it is "a sense of community"[86] as well that, the product of events, renders the citizens of an affluent society genuinely concerned about the incidence of suffering, discontent, and failure within the broad church of a common humanity. Galbraith makes no attempt to quantify the unquantifiable by providing any solid evidence that altruism has in fact advanced with prosperity rather than receded because of the market ethos that contributed so much to the affluence. Nor does he provide any real answer to those of his fellow optimists who say that the flowering of an other-oriented culture points not to an interventionist welfare state but rather to a spontaneous and individualistic welfare society. Omissions there may well be, and different thinkers will no doubt think different thoughts, but the logic of Galbraith's position remains clear nonetheless: Galbraith as a reformer and an intellectual believes he has uncovered the nature of the need, that "there are few problems in New York City which would not be solved by doubling the city budget,"[87] while Galbraith as an evolutionary economist is convinced, events breeding ideas, that his fellow-citizens are not far behind him in demanding expanded public spending on welfare.

Ordinary men and women are on the point of insisting that a welfare-conscious society cease employing "sociology as a substitute for higher taxes."[88] Ordinary men and women are also on the point of demanding more generous public funding for the arts--the simple historical truth being that, at some stage in the evolutionary process, "as consumption expands, a transcending interest in beauty may be expected"[89]: "After things work well, people want them to look well, so the arts became important."[90] More affluence and more education inevitably generate a demand for more beauty, which the person of ideas does not to any significant extent create but of which he is likely most sincerely to approve. Some of that demand will admittedly be satisfied in the private sector (designer clothing, pay-TV), and some of it even by small and non-bureaucritized undertakings (the local gallery, the one-off boutique). Some, but not all, Galbraith maintains; and that is why, if it is truly the case that "beyond the age of the engineer and the scientist lies the age of the artist,"[91] then a demand-led political system will have no alternative but to supply the museums and sponsor the orchestras that a more cultivated citizenry will increasingly wish to consume.

Balance means support to welfare and to the arts. It also means support to industry, both large and small. Thus the state should and will underwrite technological progress performed in the giant corporations where ordinary men and women are keen to consume the products but where private enterprise, without the progress-payments and the capital-infusions, is simply not prepared to assume the risks: "The old-fashioned subsonic jet passenger transport would not have existed except as a by-product of government-sponsored military development. The development of supersonic transport has had to wait on government initiative. One rewarding result of these necessities has been the discovery of how much government initiative is welcomed in a capitalist economy once it is discovered that capitalism cannot do the job."[92] The state should, because of a similar private sector deficiency, subsidize research and development done in central laboratories on behalf of the numerous small competitors who make up the market system: consumers demand high-quality milk and grain but farmers are too weak and too isolated to bring about the requisite response unassisted. Intellectuals will in such a case call for state support in the interests of social balance, but they will not be alone. Matter is in motion, history is in flux, and a citizenry that wants the foodstuffs as it wants the flights will sooner or later see that it has no alternative but to join its voice to that of big and small business alike in attacking the discredited dogma of laissez-faire. And thus do events breed ideas--as if guided by an invisible hand that never sees any reason to deviate from its line.

Regulation

Evolution produces demystification and promotes balance. It is also a stimulus to moderate state regulation. Moderate regulation, however--pragmatic and selective regulation, for the fact is that the general consensus non facit saltum, and neither therefore should the intellectual or the politician.

One form of regulation Galbraith both anticipates and advocates is regulation designed to protect the environment. The problem, in his perspective, is clear enough, and clearly the product of events, that "the price of increasing production is unpleasant and even lethal surroundings. The air is less breathable, the water less potable, the countryside is invisible and the air waves unbelievable."[93] The intellectual sees quite correctly that something must be done, but so too do ordinary men and women, who come to develop reservations of their own about lead in petrol, acid rain, the siting of waste dumps, sprawling suburbs, intrusive advertising, blighted landscapes and unsightly motorways: the intellectual's arguments evidently enjoy "much persuasive assistance from pollution,"[94] and without that assistance it is highly unlikely that they would have much influence upon a citizenry normally cozened by Madison Avenue ("We, quite literally, advertise our commitment to immaturity, mendacity and profound gullibility")[95] and occasionally cozened by Westminster and Washington ("Mr. Nixon was a premeditated assault on the public decency and interest committed in broad daylight")[96] but seldom if ever cozened by the intelligent and articulate persuaders of Harvard Square. Ordinary men and women come to see that something must be done; and it is to their reactions, given the pollution, that the bans on highway advertising in Hawaii and Vermont,[97] the controls on DDT, non-degradable detergents and supersonic aircraft,[98] must be attributed. Environmental degradation is the event, defense of amenity value the idea produced by the event; and the polluters therefore are more effective than the persuaders in bringing about the requisite regulatory reform.

Events produce the ideas that protect the environment, and in addition they are to be credited with the discovery of the macroeconomic policies that pure thinkers mistakenly ascribe to the Keynesian theorists: "Here once again it was events, not economists, that took charge--events silent, without voice and, since unrecognized, unresisted."[99] The simple fact is that monetary policy had demonstrably failed to bring about full employment and stability of total demand in the depressed conditions of the inter-war years, and that "harsh circumstance, that intractable force in economic policy, had already required what Keynes was to urge"[100]: "There remained one--just one--course. That was government intervention to raise the level of investment spending--government borrowing and spending for public purposes. A deliberate deficit. This alone would break the underemployment equilibrium by, in effect, spending--willfully spending--the unspent savings of the private sector."[101] J.M. Keynes did indeed formulate an intellectual's case for precisely such fiscal regulation, but his theoretical contribution cannot for all that reasonably be described as anything more than "a powerful affirmation of the wisdom of what was already being done under the force of circumstance"[102] "Keynes . . . made legitimate what governments of all the industrial countries, including the United States, were already doing. Depression had reduced government revenues and forced increases in spending for welfare. The result was a deficit, and out of force of circumstance this was being covered by borrowing, exactly as Keynes urged."[103] Even Adolf Hitler had grasped the nature of the demand management measures that had become inevitable, and had done so in advance of what pure thinkers were later to call the Keynesian "revolution": "Not the least remarkable feature of this revolution was by how many it had been anticipated. There were Keynesians well before Keynes. One was Hitler, who, exempt from any restraining economic theory, launched a major program of public works construction upon taking office in 1933, the Autobahnen being the most visible effect. Civil works expenditure was followed only later by that for arms. The Nazis were also indifferent to the constraints of tax revenue; deficit financing was taken for granted. The German economy recovered from the devastating slump it had previously suffered. By 1936, the unemployment that had been so influential in bringing Hitler to power had been substantially eliminated."[104]

Hitler in Germany, the New Deal in America, World War II in the offing--the young Galbraith and his fellow Harvard economists clearly had good grounds for their optimism when they launched their crusade for the Keynesian system in the 1930s: "All of us were committed to a degree of evangelism I've never felt since. There was an enormous feeling we could change things. In some ways it was a very misleading experience, you had such a sense of what an intellectual could accomplish. From that time on we all believed that if you had the right ideas, nothing stood in your way--it could be done."[105] It could indeed, given the fundamental premise that there was one and only one course of action that could rationally be adopted in the concrete material circumstances of an economy in slump. Events produce ideas. The Keynesian intellectuals only diffused those ideas that would ultimately have diffused themselves in any case. It is no surprise that they had so great an influence in the depressed conditions of the 1930s: obvious must tees are obvious must tees, and it was in nothing more than obvious must tees that the Keynesian intellectuals of the Great Depression sensibly chose to trade.

The inflationary tendencies of the 1980s presented challenges somewhat different from those of the depressed conditions of the 1930s. In the later period as in the earlier one, however, it dependably remained the case that it was the circumstances and not the intellectuals that defined the obvious must tees that would obviously solve the problems. Not all observers saw clearly what had to be done (Milton Friedman and Friedrich Von Hayek did not, Margaret Thatcher and Ronald Reagan did not), and the outcome of the error was the temporary adoption of monetarist policies in Britain and America, aberrations, fortunately, which experience and good sense will reverse[106]: "I have been reluctant to attribute the word revolution to the changes that have occurred with Mr. Reagan. I think they are temporary in the history of capitalism; supply-side economics and monetarism are transitory steps and will disappear from sight.[107] The monetarist policies of Thatcher and Reagan were out of step with the march of events, immune to historical process,"[108] and therefore doomed to failure from the day they were first misguidedly mooted. Monetarism is one of the most grievously destructive policies of modern times,[109] for it brings with it cutbacks on investment, dismissals of labor, and even bankruptcies of worthy enterprises: Monetary policy controls inflation by drastically and even permanently damaging the industrial base of the countries pursuing it.[110]Monetarism in addition is regressive in its redistribution of income and therefore at variance with the welfarist consensus of advanced capitalism: Monetary policy has a strong tilt in favor of the financially favored.... High interest rates reward those with money to lend. As a broad proposition, those who lend money are likely to have more money than those who do not!"[111] Monetarism, finally, is politically unworkable save in the hands of truly iron-willed leadership such as was conspicuous by its absence in the Reagan era: then, monetarism or no monetarism, high and stolidly defended Keynesian deficits"[112] were the order of the day, and on a scale, indeed, that Keynes himself could never have imagined.[113] That the shake-out could be short-run or the shake-up a boost to average productivity, that macroeconomic policy is not the only or even the primary arena for social policies promoting social justice, that weak administration is always and everywhere a problem, while Thatcherism converted a budget deficit into a budget surplus, these and similar monetarist arguments Galbraith puts to one side. His selectivity is highly beneficial; for it allows him to conclude that interest-rates and money supply policies are "aberrations," "temporary" and "transitory." All nations, like all persons, occasionally make mistakes. The withering away of New Deal Interventionism in the run-up to World War II was evidently such a mistake: "It was adversity that nurtured this programme; with prosperity social invention came promptly to an end."[114] The monetarist experiment in the inflationary conditions of the 1980s was no more or less than another. Historical evolution is tolerant of small steps backwards, and so is Galbraith.

Monetarism does not provide the solution to the problem of inflation, but neither in practice does Keynesianism. An increase in taxation (either progressive income tax or regressive duties on goods and services) is a traditional textbook remedy for an excess of demand over supply; but economic, social, and political factors severely limit the real world extent of any feasible rise. A cut in public spending is an alternative possibility, but in the light of popular attitudes with respect to social balance clearly not an option that any sensitive democrat could reasonably endorse. That leaves controls. The private sector already plans its prices and must do so, the loss in allocative efficiency being more than counterbalanced by the security the planning permits: "General Motors could not function without some assurance that its prices would be adequate. Price stability is necessary for its planning."[115] The public sector is itself no stranger to the planning of nominal values: controls were introduced in the United States in wartime (Galbraith himself was in charge) for the unassailable reason that "circumstances appeared to offer no other course."[116] and it was once again circumstances rather than preferences that led President Kennedy in 1961 to promulgate his "guideposts."[117] Austria and other European countries continue to this day to secure stability without stagnation by means of the obvious expedient of wage and price controls--the obvious expedient, given cost-push inflation the only expedient, and "sooner or later, the English-speaking countries will be led to recognize this."[118] Thy will do so for they must do so, the simple truth being that they have no choice: "In public affairs circumstance is far more influential and ideological preference far less important than is commonly supposed."[119] Matter is in motion, evolution is taking its course; and while the intellectual is understandably tempted to "try to advance the inevitable,"[120] nonetheless it is events and not ideas that in the Galbraithian scheme of things must ultimately be accorded the last word.